Brasília – Net foreign direct investment (FDI) inflow to Brazil stood at US$ 8.334 billion in November, an all-time high for the month, according to figures released by the Central Bank this Wednesday (18th). According to the head of the Central Bank’s Economic Department, Tulio Maciel, investment was concentrated in oil and gas. “It is likely associated with the [auction operation at] Libra field,” said the executive. The result has raised the year-to-date figure to US$ 57.478 billion.
The Libra field, in southeast Brazil’s Santos Basin, was auctioned on October 21st. The auction was won by a consortium comprising the companies Shell, Total, CNPC, CNOOC and Brazil’s state-owned Petrobras. The oil reserves are located in deep waters at the pre-salt layer, and are estimated at between 8 billion and 12 billion barrels of oil, a projection which makes it the largest oil field in Brazil.
To the Finance minister Guido Mantega, investor confidence on the Brazilian economy is on the way up. Although he concedes that this year the country has struggled with confidence issues, the result goes to show Brazil has retained its credibility.
“I think the confidence issues we have experienced this year were owed to the fact that some sectors frowned upon Brazil. But there was an overreaction. In practice, what happened was a US$ 8.33 billion investment inflow in Brazil [in November]. This shows confidence, and no one would invest here for nothing,” said Mantega.
To the minister, this result may climb to around US$ 63 billion or US$ 64 billion by the end of the year, an amount he regards as expressive considering the still-crisis-ridden world economy.
From December 1st to 16th, FDI inflows to the country stood at US$ 3 billion. The full-month projection is US$ 5.5 billion.
Following the November and December-to-date figures, the Central Bank has revised up the full-year FDI inflow forecast from US$ 60 billion, or 2.68% of the Gross Domestic Product (GDP), to US$ 63 billion, or 2.85% of the GDP. The estimate for 2014 is also $ 63 billion.
If proved true, the total amount for this year will not be enough to offset the current account deficit. The year should close on a US$ 79 billion deficit. The 2014 forecast is US$ 78 billion. These results will account for respectively 3.57% and 3.53% of the GDP.
The estimate for this year has been revised by the Central Bank. The prior deficit projection was US$ 75 billion, or 3.35% of the GDP. Year-to-date through November, the deficit was US$ 72.693 billion.
*With information from Agência Brasil. Translated by Gabriel Pomerancblum
